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While Microsoft and Google continue to gouge each other, startups such as Zoho sneak in to lure small and midsize businesses to their low-priced cloud computing apps. The startup harbors no illusions about its inferior market position to the Microsoft Office and Google Apps giants. Zoho sees the market evolving to componentization, with office apps becoming components within other apps. This threatens the $19 billion Office cash cow as Microsoft Office 2010 enters the market.

With all of the smack-talking and chest-bumping going on between Google's enterprise team and Microsoft's Office group, it's easy to forget about other cloud computing vendors who may be affected by Microsoft's launch of Office 2010 May 12.

Office 2010 includes Office Web Apps, a cloud computing-based component of its productivity software suite designed to challenge Google's own Docs document, spreadsheet and presentation applications. Office Web Apps includes Web-based editions of Microsoft OneNote, Excel, Word and PowerPoint which Microsoft users can access through their browser.

While Microsoft and Google continue to gouge each other with japes and customer wins, startups such as Zoho sneak in to lure small and midsize businesses to their low-priced cloud computing apps.

Zoho offers both Web-based collaboration apps such as Zoho Writer, Zoho Mail and Zoho Sheet, but the company also makes enterprise apps, such as Zoho CRM.

Further reading

Zoho Product Evangelist Raju Vegnesa harbors no illusions about Zoho's inferior market position to the Microsoft Office and Google Apps giants. The company has 3 million users using Zoho apps, compared to 30 million Google Apps users and 500 million-plus Office seats.

Vegnesa believes the office apps game is changing, metamorphosing into something else. He pointed to the market evolution of the telephone to mobile phones in the telecommunications market as an analogy. While analysts criticized the move to mobile phones, it's clearly worked out for carriers, with users spending more time on mobile phones than landlines.

Another example is the migration of music from the boombox to digitization on the desktop, on to mobile devices such as Apple's popular iPod, and then finally into mobile phones and other Swiss Army knife-like devices that do several things for consumers.

Vegnesa sees this same "componentization" happening in the collaboration market, with Office suites evolving from desktop application suites to online application suites.